Reliance Big Broadcasting P.Ltd, ... vs Department Of Income Tax

श्री बी. आर. बासकरण, ऱेखा सदस्य, एवुं श्री संजय गगग, न्याययक सदस्य के समक्ष

BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER

आयकर अऩीऱ सं. / ITA no.3530/Mum./2013 (ननधधारण वषा / Assessment Year : 2009-10)

Dy. Commissioner of Income Tax-10(1) ................. अऩीऱधथी / Room no.455, 4th Floor, Aayakar Bhavan 101, M.K. Road, Mumbai 400 020 Appellant

बनधम v/s

M/s. Reliance Big Broadcasting Pvt. Ltd. 3rd Floor, Reliance Energy Centre ................... प्रत्यथी / Santacruz (E), Mumbai 400 055 Respondent PAN - AAFCA8981N

रधजस्व की ओर से / Revenue by : Shri Love Kumar ननधधाररती की ओर से / Assessee by : Shri Jitendra Sanghvi

सन ु वधई की तधरीख / आदे श घोषणध की तधरीख / Date of Hearing - 11.03.2015 Date of Order - 27.05.2015

आदे श / ORDER

संजय गगग, न्याययक सदस्य के द्वारा / PER SANJAY GARG, JUDICIAL MEMBER

The present appeal preferred by the Revenue is directed against

the impugned order dated 6th February 2013, passed by the learned

Commissioner (Appeals)-21, Mumbai, for the assessment year 2009-10.

M/s. Reliance Big Broadcasting Pvt. Ltd.

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2. The sole issue raised in this appeal by the Revenue is regarding the

action of the learned CIT(A) in deleting the additions made by the

Assessing Officer on account of advances written off of ` 1,36,55,880,

which has been treated by the Assessing Officer as capital expenditure

as against the claim of the assessee that the same being revenue

expenditure.

3. The assessee company has been engaged in broadcasting T.V.

channels in English and Hindi as well as in regional languages along with

the acquisition and selling of movie rights. During the year under

consideration, the assessee had acquired telecast rights of English

movies and paid advance of ` 1,36,55,880 on signing the contract.

However, the assessee did not prefer to pay the balance amount as

business prospects of telecasting those movies were uncertain. The

assessee, therefore, got forfeited the advanced amount paid and claimed

the same as business expenditure. The Assessing Officer, however,

treated the same as capital expenditure.

4. The learned CIT(A), in view of his findings given in the impugned

order, directed the Assessing Officer to treat the said expenditure as

revenue in nature. Aggrieved by the order of the learned CIT(A), the

Department is in appeal before us.

5. We have heard the rival contentions. The learned A.R. of the

assessee has stated that the movies' telecasting rights were to be M/s. Reliance Big Broadcasting Pvt. Ltd.

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acquired for a period of 1-2 years. The assessee was supposed to earn

income from advertisements during the telecast of movies. Since it was

observed that that there was no profit prospects in the telecast of

abovestated English movies, hence it was decided not to purchase these

English movies and the advanced amount was written off. It was a

prudent business decision taken during the course of business.

Admittedly, the telecast right of the movies to be purchased were for a

short period of 1-2 years. The movies were never purchased and the

advanced money was forfeited. The assessee had taken a prudent

decision during the course of business for not purchasing the rights and

avoiding further loss. It was a business decision and the loss was

incurred by the assessee during the course of business. Hence, we do

not find any infirmity in the order of the learned CIT(A) while directing

the Assessing Officer to treat the said expenditure as revenue in nature.

Thus, this ground is dismissed.

6. ऩररणधमतः रधजस्व की खधररज अऩीऱ खधररज की जधती है ।

6. In the result, Revenue's appeal is dismissed.

Order pronounced in the open Court on 27.5.15

Sd/- Sd/-

बी. आर. बासकरण संजय गगग ऱेखा सदस्य न्याययक सदस्य B.R. BASKARAN SANJAY GARG ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, DATED: 27-05-15 M/s. Reliance Big Broadcasting Pvt. Ltd.

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Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary

Assistant Registrar ITAT, Mumbai